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Retail sales are normalizing and ecomm has reached its peak

By Christopher Lombardo
October 29, 2021

Retail, shopping, consumers
The ecomm explosion is now behind us and retail sales are starting to ebb, according to the latest analysis of Statistics Canada data from consultant Ed Strapagiel.

For the three months ending August 2021, the numbers reveal that retail ecommerce sales were up a mere 2.9% versus a year ago, a far cry from the near-20% spike for the three month period ending in May. 

And according to Strapagiel, there’s even a chance ecomm sales will decline in the next few months as in-store shopping restrictions are eased across jurisdictions. 

For the three months ending August 2021, total retail sales were up 6.8% year-over-year, but the three-month trend line, he says, “is deteriorating rapidly,” while 12-month growth is stalling (green line below). 

retail-sales-data

Store merchandise saw retail sales move higher, 8.2% year-over-year. Despite robust growth in jewellery, luggage and leather goods, clothing stores and home furnishings, Strapagiel notes that the underlying 12-month trajectory for merch is flattening and further weakening as we come to the year’s end. Electronics and appliance store sales growth was very weak, coming in at a modest 1.1%.

Retail sales in food and drug were meagre, gaining just 0.4% versus a year ago, for the period ending August 2021.

Specialty food stores, he reports, managed to eke out a small gain of 0.3%, however things were not as smooth for supermarkets and grocery overall, with retail sales in that space down 2.4% year-over-year for the three months ending in August. Convenience stores saw a similar trend southward, down 1.1% year-over-year for the same period.

Retail sales for automotive and related were still up 10.7% from a year ago, and while retail sales at dealerships is tapering off, they were still up 7.7% year-over-year in the three months ending in August. Strapagiel warns that supply chain issues may impede further growth over the balance of the year.

Broken down by region, Vancouver’s central metropolitan area (CMA) leads all geographies, with 17.1% year-over-year sales growth for the three-month period ending August. Newfoundland & Labrador was a laggard, at 1.1%.